Logistics is a critical component of supply chain management.Logistics can be defined as the management of flow of goods from the point of source to the point of consumption.The point of origin or source in most cases is the location of seller while the point of consumption is the location of the buyer.
Logistics providers nowadays have greatly enhanced their efficiency and effectiveness by employing smart devices like GPS-enabled trackers and sensors. Many have started employing containers equipped with tracking devices. These containers are therefore able to provide their location round-the-clock to the logistics manager sitting at a distant location. Improved efficiency has resulted in lower costs of logistics while effectiveness has translated into faster and accurate delivery.
Another change that is happening in logistics management is that last mile delivery is often being provided by specialized, local distribution companies. The supplier sends the goods to the warehouse of these companies who then deliver the goods to the doorsteps of the customers or buyers. This trend is currently at an early stage but is likely to strengthen in the near future. The employment of separate last mile distribution companies ensures effective delivery in areas which are densely populated, remote or large.
Employment of last mile distributors requires increased collaboration across the logistics chain. This collaboration is being achieved through employment of communications technology like cell-phones and GPS-enabled trackers. However employment of these technologies is capital-intensive. Global level logistics require common technological standards and protocols being adopted everywhere. Ensuring effective collaboration across the logistics chain, when there are last mile distributors involved, will remain a big challenge.
In an increasingly interconnected world driven by internet and globalization the significance of logistics will only increase. The growth of e-commerce is underpinned on effective logistics management. Logistics management may soon become the most important activity in supply chain management. Companies can make logistics a source of competitive advantage. Those who make the first move in modernizing their logistics may reap rich dividends later on.